Law-abiding businesses being undercut by tax fraudsters will benefit from a new initiative according to the tax authorities.
A new crackdown on tax evasion will make information on all credit and debit card payments to UK businesses available to HM Revenue and Customs (HMRC) for the first time.
Under new powers, HMRC can now access information from the UK’s merchant acquirers – the companies that process card payment transactions – to find out the number and value of transactions completed by a specific trader.
No personal data identifying the card owners or card numbers will be obtained, but this data will be used to ensure that traders have correctly accounted for all taxes due. HMRC estimates that this information could reduce fraud by over £50m a year.
Exchequer secretary to the Treasury David Gauke said: “Tax evasion and the hidden economy cost the taxpayer £9bn a year. While the majority of traders are honest, they may find themselves undercut by the minority who seek to lower prices by cheating the tax system.
“The Government has given HMRC nearly £1bn to tackle fraud and evasion, and these new powers give HMRC an extra tool to ensure a level playing field between businesses, and also reducing opportunities for those who try and cheat the system.”
The legislation allows HMRC to obtain data on card payments to all UK businesses for the previous four years, and this will be cross-referenced with data the tax authority already holds.